OM, the native token of Mantra's Layer-1 blockchain for real-world assets (RWA), has witnessed a significant rally, increasing by over 30% in the past 24 hours. It reached a new all-time high of $4.52 on Monday before pulling back to $4.20, where it is currently trading.
Despite the impressive rise, on-chain indicators show signs that the momentum of OM may be slowing down. This is why.
Mysterious traders are distributing for profit
The net flow of major OM stakeholders has decreased in recent days. According to IntoTheBlock data, it has dropped by 54% in the period from November 14 to 17. This indicates reduced whale accumulation, which could exert bearish pressure on the altcoin.
Major holders are addresses that control more than 0.1% of the circulating supply of the asset. The net flow index measures the difference between the amounts these investors buy and sell over a specific time frame.
The decline in net flow indicates that whale addresses are reducing their positions, a bearish indicator that could signal increasing selling pressure and high downside risk.
Net flow of major OM holders. Source: IntoTheBlock
Notably, the decline in net capital flow from major stakeholders is accompanied by a spike in supply ratio, confirming a sell-off state. According to Santiment data, the supply of OM on cryptocurrency exchanges has increased by 2% over the past three days. As of this writing, 134 million OM tokens worth over $553 million are held in wallets on exchanges.
When an asset experiences a sudden increase in supply on exchanges, it indicates that many tokens are being moved from personal wallets to exchange wallets. This suggests that investors may be preparing to sell, leading to increased selling pressure. Such a trend is often bearish, as it can lead to the possibility of price declines due to increased supply in the market.
OM supply on exchanges. Source: Santiment
OM Price Prediction: The token has two options
Currently, RWA assets are trading at $4.20. If profit-taking continues, the Mantra token could lose its recent gains, potentially dropping 15% to $3.56. If the momentum weakens further at that level, it may not hold strong support, potentially leading to a deeper drop to $2.80.
OM price analysis. Source: TradingView
Conversely, a resurgence of buying pressure could push the token back to the all-time high of $4.52 and possibly beyond.